How Much Should I Spend on Google Ads to Get Results?

When it comes to running a successful Google Ads campaign, your budget is one of the most crucial factors that will determine your results. In the first part of this guide, we’ll focus on how to build your Google Ads budget—covering everything from keyword research to geographic targeting and the pricing of your product or service. These foundational elements will help you understand how much you need to spend to see meaningful results.

In the second part, we’ll dive into tips and tricks for maximizing your budget, ensuring that every dollar works hard for you. Whether it’s using negative keywords, crafting compelling ad copy, or leveraging ad extensions, these strategies will help you stretch your budget further while boosting your ad performance.

Your Google Ads Budget

1. Start with Keyword Research: The Foundation of Your Budget

The first step in coming up with a suitable budget for your local business, is keyword research.  Start by thinking of the keywords that are most closely related to the product or service you offer. For example, if you own a hair salon, a relevant keyword might be “hair salon near me.” If you’d like more tips on selecting the right keywords, you can read this blog.

Once you have selected some relevant keywords, you are going to look at the bid range. Google Keyword Planner will always show you two things: the lowest bid and the highest bid. This essentially means that the price you will pay for each click will be between the lowest and highest number. So, how can we use this information?

You multiply the highest bid by 5. Let's say the keyword "hairsalon near me" has a bid range of $2 - $4. You will multiply $4 by 5, which equals 20. For a healthy campaign, you will need to spend at least $20 a day.

Summarized:

• Use the Keyword Planner Tool: Imagine you run a local plumbing business. You’d start by entering terms like “emergency plumber near me” or “pipe repair services” into Google’s Keyword Planner tool.

• Examine Bid Ranges: Let’s say the tool suggests that advertisers are bidding between $3 and $8 per click for these terms. Take the upper end of the range.

• Multiply by 5: For a healthy campaign, multiply that high bid ($8) by five. This means you should aim to spend at least $40 per day on that keyword. This gives you enough data to see meaningful results—at least five clicks per day.

Example: If you’re promoting a bakery and the Keyword Planner shows that “birthday cakes near me” has a bid range of $2 to $5 per click, you should budget a minimum of $25 per day ($5 x 5 clicks).

Tip: If you’re in a competitive industry like real estate, where keywords like “homes for sale in [city]” might cost $10 or more per click, aim for at least 10 clicks per day for stronger results, which would put your budget at $100+ per day.

Target Your Geographic Area

The geographic area you’re targeting plays a big role in how much you’ll need to spend per keyword. After conducting keyword research, you’ll notice that the cost-per-click (CPC) will vary depending on whether you’re in a low-competition or high-competition location.

• Small towns or suburbs: If your business is in a small town or suburban area, you’ll likely see lower competition for keywords. This means your CPC will be on the lower side. For example, a local pet grooming service in a small town might only pay $2 per click for keywords like “pet grooming near me.”

• Big cities: In larger cities with more businesses vying for attention, the cost per click will be much higher due to competition. A real estate agent trying to target keywords like “homes for sale in Los Angeles” might see CPCs as high as $10-15 per click, depending on how competitive the market is.

2. What’s Your Campaign Goal?

Your Google Ads budget also depends on what you want to achieve. Let’s think about your end goal:

• Lead generation: Are you looking to generate leads? Maybe you’re a local dentist trying to get people to sign up for teeth whitening. Lead generation campaigns often require higher budgets because they target potential clients who are ready to take action. You might need to spend $50 per day to get a solid number of leads.

• Website traffic: If your goal is to drive traffic to your website, you can probably budget less. For example, a local flower shop might want more people to visit their site for tips on flower care. You might spend $15-20 per day.

• Sales conversions: If you’re trying to get actual sales, the budget will vary depending on the value of what you’re selling. A furniture store promoting a sale on dining sets might need to allocate $40-50 per day.

Example: A spa offering a special deal on facials might spend $30 per day to bring in bookings, while a local gym promoting free trial memberships might spend $20 per day to drive signups.

Why This Matters:

Different goals require different strategies, and your budget should reflect that. Lead generation often requires more upfront spending, while simple traffic-building campaigns can be less costly.

Correlation between Campaign Goal and Keywords

Once you know the bid range for your chosen keywords, you can then align this with your campaign goal. For example, if you’re trying to generate leads (which typically needs a higher budget), you’ll want to bid higher to ensure you get those key actions from high-intent users. If the bid for “hair salon near me” is $4, and you aim for 5 clicks/day, that’s at least $20/day. But if lead generation is your goal, you may aim for 10 clicks/day to ensure a higher chance of conversions, raising the budget to $40/day.

• Keyword research gives you the cost per click, which is essential for setting a daily budget.

• Campaign goals determine how many clicks or actions you need to hit your targets, which will help shape the total budget based on the costs discovered during keyword research.

How to Get the Most Out of Your Google Ads Budget: Tips and Tricks

The factors from above will have the biggest impact on your budget. But we all want to make sure we’re getting the most out of our money. In this section, I’ll share some simple, practical tips on how to make your budget go further and what you can do to get the best results.

1. Focus on High-Value Products or Services

Once you’ve set your initial budget, it’s important to focus that spending on the most profitable product or service. This ensures your ad dollars are spent on what brings you the highest return. So, start by focusing your budget on just one product or service. We often have an “all-or-nothing” mindset, where we want to advertise everything at once or nothing at all. The problem with advertising everything is that you’re trying to target a very broad audience, which means your ad won’t resonate with anyone specifically. The only way to make up for this is to have a very large budget, but even then, it’s not the most effective approach.

The most effective approach is to start with your product or service that you sell the most or that makes you the most profit.

• Why focus matters: If you spread your budget across too many products or services, you risk diluting the effectiveness of your ads. Instead, focus on one core offer—something that either has the highest profit margin or is the most popular among customers.

• Example: If you run a bakery, rather than advertising all your products (cakes, pastries, cookies), focus your budget on your best-selling wedding cakes. By driving more traffic to this high-value product, you increase the chances of a significant return.

Tip: Start small. Once you see positive results with one product or service, you can reinvest your profits into other offerings.

2. Write Compelling Ad Copy That Drives Action

To get the most out of your budget, you need to ensure that when people see your ad, they actually click. Well-crafted ad copy can boost your click-through rate (CTR), which helps lower your cost-per-click (CPC) over time due to improved Quality Score.

• Why this matters: The more engaging your ad copy, the more likely users will click on your ad, improving your overall ad performance. Google rewards ads with a higher CTR by lowering your costs.

• Example: If you’re running a promotion for a spa, a headline like “Get 20% Off Your First Massage—Book Now!” is likely to drive more clicks than a generic headline like “Best Spa Services.”

Tip: Use strong calls-to-action (CTAs) like “Book Today” or “Limited Time Offer” to create urgency and drive clicks. Also, make sure your ad copy aligns with your target keywords.

Read this blog for a guide on how to write the most compelling ad copy that drives action.

3. Use Ad Extensions for More Visibility

Ad extensions are free features in Google Ads that provide extra information about your business, such as your phone number, address, or links to other parts of your website. Adding extensions can make your ad more clickable without increasing your cost-per-click.

• Why this matters: Ad extensions can increase your ad’s visibility and provide users with more ways to engage with your business. Google favors ads with extensions, which can improve your ad position and potentially lower costs.

• Example: If you run a local restaurant, you can add location extensions to show your address and directions, or call extensions so people can call directly from the ad.

Tip: Use sitelink extensions to link to specific pages on your website, like your “Special Offers” or “About Us” pages, giving users more options to interact with your business.

4. How Long Has Your Business Been Around?

How long you’ve been in business makes a big difference when it comes to your Google Ads budget.

• New businesses: If you’re just starting out, you’ll need to invest more upfront to build awareness and attract new customers. For example, if you’ve just opened a boutique fitness studio, you might need to spend $1,000 to $1,500 in the first month to get noticed and start building your client base. Alongside ads, building a solid base of online reviews is crucial—positive reviews can help build trust quickly, which means your ads will convert better over time.

• Established businesses: If you’ve been around for years and have a solid reputation with strong customer reviews, you can typically spend less on Google Ads. Maybe you’re a well-known local restaurant that just needs to maintain visibility for specific promotions. In this case, spending $300 to $500 per month could be enough to stay top of mind. Since reviews already demonstrate credibility, your ads will benefit from the social proof, helping them perform more effectively.

Example: A new landscaping company in a crowded market might need a higher monthly budget of $1,500 to break into the competition, while a long-standing hair salon with established clientele and great reviews might only need to spend $300 to promote seasonal offers.

Why This Matters: New businesses need a bigger push to gain traction, especially when they lack a solid base of reviews. Established businesses with positive reviews already have some momentum, allowing them to spend less on ads while maintaining visibility.

5. A/B Test and Optimize Regularly

Your ads will likely not be perfect from the start, and that’s okay. One of the best ways to improve your ad performance over time is through A/B testing. This involves creating multiple versions of your ad with slight variations (like different headlines, descriptions, or images) and seeing which performs better.

• Why this matters: A/B testing allows you to continually improve your ads and focus your budget on what’s working. By identifying high-performing versions of your ads, you can refine your campaign and cut out what’s not effective.

• Example: Let’s say you own a car repair shop and are testing two different headlines: “Get a Free Oil Change with Every Service” and “Car Repair You Can Trust—Call Today.” You might find that the first headline performs better in terms of clicks and conversions, allowing you to optimize future ads around that message.

Tip: Start with small variations—changing just one element at a time—and monitor your results over a week or two before making adjustments.

Conclusion

These tips will play a key role in managing your Google Ads budget, and it all comes down to research and applying the right tactics. If, after reading this guide, you’re thinking, “These are great tips Floor, but I don’t have the time to handle all this—I have a business to run!” I completely understand, and that’s where we come in. You don’t need a huge budget to see results. If you’re curious about how we can help you implement the right strategies to grow your business, so you have the freedom to focus on your business, book a demo with me, and let’s discuss how we can make it happen.